Different organizations use different criteria
to group countries by their level of development. The World Bank, for
instance, uses GNP per capita to classify
countries as low-income (GNP per capita
of $765 or less in 1995), middle-income
(including lower-middle-income, $766
to $3,035, and upper-middle-income,
$3,036 to $9,385), or high-income
($9,386 or more; Map 2.1).

IndiaChinaRussiaBrasilUSAGermanyJapan

GNP per capita(US Dollars)

GNP per capita(PPP Dollars)

3406202 2453 64026 98027 51039 640

1 4002 9204 4805 40026 98020 07022 110

A more popular, though apparently more
disputable, approach involves dividing all
countries into "developing" and
"developed"- despite the general understanding
that even the most developed
countries are still undergoing development.
Dividing countries into "less developed"
and "more developed" does not
help much either, because it is unclear
where to draw the line between the two
groups. In the absence of a single criterion
of a country's development, such divisions
can only be based on convention among
researchers. For example, it is conventional
in the World Bank to refer to low-income
and middle-income countries as
"developing," and to refer to high-income
countries as "industrial" or "developed."

The relatively accurate classification of
countries into "developing" and "developed" based on their per capita income
does not, however, work well in all
cases. There is, for instance, a group of
"high-income developing countries"
that includes Israel, Kuwait, Singapore,
and the United Arab Emirates. These
countries are considered developing
because of their economic structure or
because of the official opinion of their
governments, although their incomes
formally place them among developed
countries.

Another challenge is presented by many
of the countries with "transition" or "formerly
planned" economies- that is,
countries undergoing a transition from
centrally planned to market economies.
On the one hand, none of these countries has
achieved the established threshold
of high per capita income. But on
the other, many of them are highly
industrialized. This is one reason their
classification by the World Bank is currently
"under review." Note that in the
World Bank's World Development Report
1982 these same countries were classified
as "industrial nonmarket," and in
current United Nations publications
most of them are still grouped among
"industrial" countries.

In 1995 less than 1 of every 6 people in
the world lived in high-income (developed)
countries, and almost 2 of every 6
lived in transition countries-
including 21 percent of the world population
in China alone (Figure 2.2).